Hands of bank bosses 'poised quivering over relocate button' amid Brexit fears Bank bosses have their hands ” poised quivering…
It is claimed international banks are planning for the worst case scenario following the Brexit vote
Bank bosses have their hands ” poised quivering over the relocate button” and are bracing themselves for the “worst case scenario” as Britain embarks on its exit from the European Union, according to a key industry body.
Anthony Browne, chief executive of the British Bankers’ Association (BBA) , said international banks were so gripped by uncertainty that they were planning for a Brexit where Britain exits the European single market and falls back on World Trade Organisation (WTO) rules.
He said such a move would leave the banking industry standing at a “cliff edge” without the legal certainty and passports needed for trading across the EU.
Speaking at the BBA conference, Mr Browne said: “With so much uncertainty about the next couple of years, international banks are all planning for the worst case scenario – that we end up on WTO rules.
“They have set up project teams to work out what operations they need to move by when, and how best to do it.
“It can take years to move a business. So they cannot wait until the end of Article 50 negotiations in 2019, but have to start taking action much sooner.
“Their hands are poised quivering over the relocate button, with the first movements expected in the coming months. There is no room for complacency.”
According to TheCityUK, a so-called “hard Brexit” – where Britain leaves the single market in order to take a tighter grip on immigration – could cost the City of London 75,000 jobs.
Mr Browne said leaving the single market would also create legal problems for heavyweight financial institutions and ramp up market uncertainty.
” We face a ‘cliff edge’ where suddenly the £20 billion a year cross-channel trade in financial services would be thrown into legal uncertainty,” he added.
“In many cases, UK banks will no longer be able to legally sell services to their customers in the EU. There is a big risk to disruption to markets.
“That is why it is so important for the industry to have transitional arrangements, to ensure customers can continue getting the financial services they need between the UK leaving the EU, and the new UK-EU partnership agreement coming into force.”
Mr Browne also called for Chancellor Philip Hammond to “normalise” taxes on the banking industry when he announces his Autumn Statement on November 23.
He said Mr Hammond should scrap the tax surcharge on banking profits and bring forward the reduced scope of the bank levy to within the life of the current Parliament.
His calls come as the Chancellor said on Wednesday that the concerns of the financial sector will be a “very high priority” for the Government in its Brexit negotiations.
It is feared that a “hard Brexit” could see key services in the City of London shift to rival financial centres, such as Paris or Frankfurt, as firms look to keep hold of the passporting rights needed to trade freely across the EU.
During a session on Brexit and banking at the BBA conference, Sylvie Bermann, French ambassador to Great Britain and Northern Ireland, said the French were looking to capitalise on Britain’s vote for Brexit by wooing financial firms to Paris.
She said it was “fair competition – that’s what we learnt from the British”.
Gerard Lyons, chief economic strategist at Netwealth Investments, said businesses wanted certainty by knowing that the Government will trigger Article 50 – the mechanism which begins Britain’s formal exit from the EU – sooner rather than later.
However, former attorney general Dominic Grieve MP called into question Prime Minister Theresa May’s pledge to trigger Article 50 by the end of March next year, branding the timescale “optimistic”.
Mr Grieve said it was an “absolute necessity” that the terms in which Britain exits the EU are debated by Parliament. He said there was a “perception that options are being closed down without proper consideration”.
He added that the Government was going to find Brexit “very difficult to achieve” and it would have to be ruthless because there are piles of papers in Whitehall pointing out the “overwhelming complexity” of leaving the European Union.